Summary of Consolidated Financial Results for the Fiscal Year Ended January 31,
2024 [Japanese GAAP]
March 8, 2024
Name of listed company:
Code:
9692
Representative: (Title)
Contact:(Title)Computer Engineering & Consulting Ltd.
URL: https://www.cec-ltd.co.jp/en/
Representative Director & President
General Manager, Accounting & Finance Division

Listed exchange: Tokyo(Name) Takashi Himeno(Name) Yoshiyuki Nakamura
Tel. +81-(0)46-252-4111

Scheduled date of Ordinary General Meeting of Shareholders: April 23, 2024
Scheduled date of dividend payments:
April 24, 2024
Scheduled submission date of Securities Report:
April 23, 2024
Supplementary materials prepared for financial results: Yes
Briefing held on financial results:
Yes (for institutional investors and analysts)(Rounded down to the nearest million yen)
1.

Consolidated financial results for the fiscal year ended January 31, 2024
(February 1, 2023 through January 31, 2024)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales

Operating income

Ordinary income

Net income attributableto owners of parent%
Million yen%

Million yen%

Million yen%

Million yen

53,124

10.2

6,361

45.4

6,409

45.2

4,541 (12.3)

48,206

6.6

4,374

4.0

4,413

3.1

5,179

FY ended Jan.
2024
FY ended Jan.
2023
(Note) Comprehensive income:FY ended Jan. 2024
FY ended Jan. 2023

4,916 million yen (4.1)%
5,128 million yen 88.1%

Net income per Diluted net income
share
per shareYen
Yen
FY ended Jan.
2024
FY ended Jan.
2023

70.4

%

Ordinary income
to total assets%

Ordinary income
to net sales%

Return on equity

135.15135.00

11.6

13.1

12.0

151.97151.45

14.2

9.6

9.1

(2) Consolidated financial position
Total assets
Million yen

Net assets
Million yen

51,391
46,333

FY ended Jan.
2024
FY ended Jan.
2023

Equity ratio%

Net assets per share
Yen

40,78779.3

1,212.54

37,37980.5

1,111.48(Reference) Total shareholders’ equity: FY ended Jan. 2024 40,760 million yen
FY ended Jan. 2023 37,309 million yen(3) Consolidated cash flow

FY ended Jan.
2024
FY ended Jan.
2023

Cash flow fromoperating activities
Million yen

Cash flow frominvesting activities
Million yen

5,682

(747)

(1,526)

26,714

2,494

1,930

(3,559)23,302- 1-

Cash flow from
Cash and cash equivalents
financing activities
at end of period
Million yen
Million yen

2.

Dividends
Annual dividends
Q1 endFY ended Jan. 2023
FY ended Jan. 2024
FY ending Jan. 2025
(Forecast)

Q2 endQ3 endYear end

Total

Yen
–
–

Yen
25.00
25.00

Yen
–
–

Yen
20.00
30.00

Yen
45.00
55.00

–

25.00

–

30.00

55.00

Dividends(total)Dividends/
net assets(consolidated)
%
%
29.6
4.2
40.7
4.7

Payout ratio(consolidated)

Million yen
1,518
1,848

43.0

(Note) Breakdown of dividends at end of second quarter of fiscal year ended January 31, 2023: Ordinary dividend 20.00 yen, special
dividend 5.00 yen

3.

Forecasts of consolidated financial results for the fiscal year ending January 31, 2025
(February 1, 2024 through January 31, 2025)(Percentages indicate year-on-year changes.)
Net sales

H1
Full year

Million yen%

27,70056,500

4.7
6.4

Operating income

Ordinary income

Net income
attributable toowners of parent

Million yen

Million yen

Million yen%

3,160 (10.4)
6,280 (1.3)%

3,175 (10.5)
6,300 (1.7)

Net income
per share%Yen

2,170 (11.5)
4,300 (5.3)

64.55
127.91*Notes(1) Significant changes in subsidiaries during the period (transfer of specific subsidiaries accompanying changes in scopeof consolidation): None
Additions: 0 (company names)
Removals: 0 (company names)(2) Changes in accounting policies or estimates, restatements:(i) Changes in accounting policies accompanying revisions of accounting standards, etc.:(ii) Changes other than those under (i) above:(iii) Changes in accounting estimates:(iv) Restatements:

Yes
None
None
None

(Note) For more information, see “(5) Notes on the Consolidated Financial Statements (Changes in Accounting Policies)” under“3. Consolidated Financial Statements and Major Notes” on page 16 of the accompanying materials to this Summary.

(3) Number of shares issued and outstanding (common stock)(i) Number of shares issued and outstanding(including treasury stock)

FY ended Jan. 2024(ii) Ended number of shares of treasury stock

FY ended Jan. 2024(iii) Average number of shares during period

FY ended Jan. 2024

37,600,000
FY ended Jan. 2023
shares37,600,000
shares3,983,862
FY ended Jan. 2023
shares33,604,840
FY ended Jan. 2023
shares

4,032,960
shares34,080,884
shares(Reference) Nonconsolidated Financial Results
1.

Nonconsolidated financial results for the fiscal year ended January 31, 2024
(February 1, 2023 through January 31, 2024)(1) Nonconsolidated operating results

FY ended Jan. 2024
FY ended Jan. 2023

Net sales
Million yen
40,71536,659(Percentages indicate year-on-year changes.)
%
11.1
6.5

Operating income
Million yen
%
4,988
59.1
3,136
5.6

Diluted net income per
share
Yen
Yen
123.83123.70137.28136.80Net income per share
FY ended Jan. 2024
FY ended Jan. 2023

- 2-

Ordinary income
Million yen
%
5,570
58.3
3,518
3.2

Net income
Million yen%
4,161(11.1)
4,678
81.1

(2) Nonconsolidated financial position
Total assets
FY ended Jan. 2024
FY ended Jan. 2023

Million yen
42,69938,209(Reference) Total shareholder equity

Net assets

Equity ratio

Million yen
33,78531,048

Net assets per share
%
79.1
81.1

Yen
1,004.25
922.87

FY ended Jan. 2024 33,758 million yen
FY ended Jan. 2023 30,978 million yen* The Summary of Financial Results is not subject to audits by a certified public accountant or audit firm.
* Note on forward-looking statements and other notes(Forward-looking statements)
The forecasts of financial results above are based on information available as of the date this document is released.
Actual results may differ from forecasts for various reasons. Please see page 7 of the accompanying materials for theassumptions underlying forecasts and other related information.
(Financial results briefing, how to obtain supplementary briefing materials)
The Company will hold an online financial results briefing for institutional investors and analysts on Wednesday, March
13, 2024. It plans to publish the materials to be used in the financial results briefing on the Company website(https://www.cec-ltd.co.jp) on Friday, March 8, 2024. The Company plans to release a video of the financial results
briefing on Friday, March 15, 2024.

- 3-

Contents of accompanying materials
1.

Overview of Business Results, etc. .......................................................................................................................................... 5(1)

Overview of Business Results for The Period under Review .................................................................................................. 5(2)

Overview of Financial Position in The Period under Review .................................................................................................. 6(3)

Overview of Cash Flows in The Period under Review ........................................................................................................... 6(4)

Outlook................................................................................................................................................................................ 7(5)

Basic Policy Regarding The Distribution of Earnings and Dividends for This and The Next Fiscal Year ................................. 7

2.

Basic Philosophy on Selection of Accounting Standards ........................................................................................................... 73.

Consolidated Financial Statements and Major Notes ................................................................................................................ 8(1)

Consolidated Balance Sheet .................................................................................................................................................. 8(2)

Consolidated Statement of Income and Consolidated Statement of Comprehensive Income .................................................. 10(Consolidated Statement of Income) ................................................................................................................................... 10(Consolidated Statement of Comprehensive Income) ........................................................................................................... 11(3)

Consolidated Statement of Changes in Equity...................................................................................................................... 12(4)

Consolidated Statement of Cash Flows................................................................................................................................ 14(5)

Notes on The Consolidated Financial Statements ................................................................................................................. 16(Notes on The Going Concern Assumption) ........................................................................................................................ 16(Changes in Accounting Policies) ....................................................................................................................................... 16(Segment Information, etc.) ................................................................................................................................................ 16(Per-Share Information) ...................................................................................................................................................... 19(Significant Subsequent Events) .......................................................................................................................................... 19

4.

Other .................................................................................................................................................................................... 20- 4-

1. Overview of Business Results, etc.
(1)

Overview of Business Results for The Period under Review
Japan’s economy experienced gentle recovery during the consolidated fiscal year under review (February 1, 2023 throughJanuary 31, 2024) due to various policies, with improving employment and income conditions. Nevertheless, the future
outlook includes the risk that an economic downturn overseas will exert downward pressure on the domestic economy.
Examples include concerns about a slowdown in the Chinese economy. Other notable factors include inflation, geopoliticalrisks, and fluctuations in financial and capital markets.
In the information services industry, as domestic economic recovery continues, investments are growing in digitaltransformation (DX) to improve corporate productivity and competitive strengths. Demand for digitalization, including system
upgrades and migration to the cloud as part of business structural reforms, is expected to grow. In particular, use of ChatGPT
and other generative AI solutions is spreading rapidly. Attention is increasingly turning to business efficiency improvements
and workstyle reforms using AI. In addition, demand for cybersecurity solutions continues to show rapid growth in response toincreasingly sophisticated cyber attacks.
Under these circumstances, the CEC Group carried out its business in accordance with three basic policies: (i) strengthening
business capabilities; (ii) strengthening human resources and technical capabilities; and (iii) strengthening the managementfoundations based on its medium-term management plan for the three-year period from the fiscal year ended January 2023
through the fiscal year ending January 2025. This plan seeks to realize a sustainable society and achieve sustained growth. In
the area of (i) strengthening business capabilities, we sought to propose solutions suited to priority investment areas forcustomers and to enhance sales of our own products and services. These efforts led to growth in both our focus businesses andcore businesses, with profits reaching a new record high. In the area of (ii) strengthening human resources and technicalcapabilities, we reformed the HR system, enhanced hiring and improved employee compensation and treatment, and enhanced
training programs in various areas, including programs related to earning official qualifications. In the area of (iii)
strengthening the management foundations, we strengthened governance by adopting a system of performance-linked
remuneration and promoted ESG initiatives by expanding ISO 14001 certification, among other efforts to boost corporate
value.
The business results for the period under review demonstrated positive results due to proposals of ICT solutions in line withthe priority investment areas of major customers in both core businesses *1 and focus business areas *2, driving net sales up
4,917 million yen (10.2%) from the previous year to 53,124 million yen. In terms of profit, higher sales combined withsustained efforts to expand sales of Company products and services, coupled with productivity improvements, led to growth of
1,987 million yen (45.4%) in operating income to 6,361 million yen and growth of 1,996 million yen (45.2%) in ordinary
income to 6,409 million yen. Net income attributable to owners of the parent was down 637 million yen (12.3%) to 4,541
million yen due to the elimination of the gain on the sale of investment securities recorded last year.
*1 Core businesses:

The Company defines its core business as those that function as stable foundations supporting theCompany's operations, including contracted development, which serves as the basis of Company
sales; provision and operation of ICT infrastructure, development of onboard devices, embedded
development, and the testing business.

*2 Focus business areas:

The Company’s six focus business areas are (1) production and logistics solutions, (2) mobility
services, (3) services provided in cooperation with Microsoft Japan, (4) migration services, (5)security services, and (6) DX cloud platforms.

Business results in the individual segments are reviewed below.
(Digital Industry Business)
In the core businesses, services in both central and Western Japan demonstrated positive trends, backed by active ICT
investment among manufacturing customers. The focus business area of mobility services demonstrated positive trends inareas such as Big Data analysis and smartphone app development in the MaaS domain. In production and logistics solutions,while results related to smart factory solutions were down from the previous year due to restrained investment, logistics
solutions recorded strong performance. As a result, net sales increased by 1,479 million yen (8.8%) from the previous year to
18,313 million yen. Operating income was up 242 million yen (6.3%) over the same period to 4,100 million yen due to higher
net sales.
(Service Integration Business)
The core businesses of ICT infrastructure development, including operations and systems development, trended positively.
Services provided in cooperation with Microsoft Japan, one of the Company's focus businesses, also maintained favorable
performance thanks to growth in Dynamics 365 and Power Platform inquiries. Demand also grew for migration services aimed
at cloud migration and security enhancements against a backdrop of DX promotion. Despite the effects of lower stock sales,
security services continued to show strong income performance, driven by the effects of recording results for Company
products during the second quarter. As a result, net sales increased by 3,438 million yen (11.0%) from the previous fiscal year- 5-

to 34,810 million yen. Operating income was up 2,032 million yen (44.4%) over the same period to 6,606 million yen, thanks
to sales promotion of Company products and services and the effects of higher net sales.
(2)

Overview of Financial Position in The Period under Review(Total assets)
Total assets as of the end of the period were 51,391 million yen, up 5,057 million yen from the end of the previous
consolidated fiscal year. This was due mainly to an increase of 3,412 million yen in cash and deposits.
(Liabilities)
Total liabilities amounted to 10,603 million yen, up 1,649 million yen from the end of the previous consolidated fiscal year.
This was due mainly to an increase of 914 million yen in asset retirement obligations under non-current liabilities and anincrease of 617 million yen in contract liabilities included under other non-current liabilities.
(Net assets)
Net assets increased by 3,407 million yen from the end of the previous fiscal year to 40,787 million yen. This was mainly due
to an increase of 3,029 million yen in retained earnings.

(3)

Overview of Cash Flows in The Period under Review
Cash and cash equivalents (“funds” hereinafter) as of the end of the fiscal year ended January 31, 2024 stood at 26,714 million
yen, up 3,412 million yen from the end of the previous fiscal year.
(Cash flow from operating activities)
Funds increased by 5,682 million yen as a result of operating activities (for an increase of 3,187 million yen in proceeds fromthe previous period). This was due mainly to income before income taxes of 6,393 million yen.
(Cash flow from investing activities)
Funds decreased by 747 million yen as a result of investing activities (for a decrease of 2,678 million yen in proceeds from theprevious period). This was due mainly to expenditures of 430 million yen on purchase of non-current assets.
(Cash flow from financial activities)
Funds decreased by 1,526 million yen as a result of financial activities (for a decrease of 2,033 million yen in spending fromthe previous period). This was due mainly to payment of 1,512 million yen in dividends.
(Reference) Trends in indicators related to cash flow
FY ended Jan. 2022

FY ended Jan. 2023

FY ended Jan. 2024

Equity ratio (%)

78.7

80.5

79.3

Equity ratio based on market value (%)

82.5

109.3

107.7

Cash flow-to-interest-bearing liabilities ratio (years)

0.1

0.2

0.1

1,070.3894.8

2,351.5

Interest coverage ratio (times)(Notes) 1.

The indicators above were calculated as follows:
Equity ratio:

total shareholder equity/total assets

Equity ratio based on market value:market capitalization / total assets

Cash flow-to-interest-bearing liabilities ratio: interest-bearing liabilities/cash flow from operating activities
Interest coverage ratio:

cash flow from operating activities/interest payments

2.

Each indicator was calculated using consolidated financial figures.

3.

Market capitalization was calculated using the following formula: stock price at end of fiscal year × (number of shares issued andoutstanding at end of fiscal year - number of shares of treasury stock at end of fiscal year).

4.

Operating cash flow refers to cash flow from operating activities as reported in the Consolidated Statement of Cash Flows.

5.

Interest-bearing liabilities refer to all liabilities reported on the Consolidated Balance Sheet for which interest is currently being
paid. Interest expenses reported on the Consolidated Statement of Income are used as interest payments.

- 6-

(4)

Outlook
The CEC Group is currently making progress on its medium-term management plan for the three-year period from the fiscal
year ended January 31, 2023 through the fiscal year ending January 31, 2025. The coming fiscal year ending January 31, 2025
(February 1, 2024 through January 31, 2025) will be the final fiscal year of this plan. Based on the three basic policies—(1)strengthening business capabilities, (2) strengthening human resources and technical capabilities, and (3) strengthening themanagement foundations—we will strive to achieve continual growth in our corporate value while aiming to deliver solutions
to social and industrial challenges through our business activities. Having identified this as a turning point toward businessstructural reforms intended to achieve our VISION 2030 for the fiscal year ending January 31, 2031, we plan to implement
growth investments to expand the scale of our businesses ahead of schedule, starting in the next fiscal year. We have revised
our forecasts for the next consolidated fiscal year to net sales of 56,500 million yen and operating income of 6,300 million yen.
* For more information, refer to the materials to be used in the financial results briefing, released today.
* Forecasts of business results reflect judgments based on information currently available. They do not guarantee that theCompany will achieve forecast results. Actual results may vary from forecast figure due to changing business conditions andother factors.

(5)

Basic Policy Regarding The Distribution of Earnings and Dividends for This and The Next Fiscal Year
The Company recognizes returns of earnings to shareholders as a key issue. Our basic policy regarding the distribution of
earnings is to continually pay stable dividends in a manner that reflects consideration of various factors, including trends inbusiness results, financial position, and future business prospects. The medium-term management plan announced March 17,2022 sets as its quantitative target the maintenance of a dividend payout ratio of at least 40%.
The Company paid an interim dividend of 25 yen per share in this period. It plans to submit to the 56th Ordinary General
Meeting of Shareholders, planned for April 23, 2024, a proposal to pay a year-end dividend of 30 yen per share with a basis
date of January 31, 2024. This would result in annual dividends of 55 yen per share, including the interim dividend.
We plan to pay annual dividends of 55 yen per share in the next fiscal year, consisting of an interim dividend of 25 yen per
share and a year-end dividend of 30 yen per share.
* A breakdown of annual dividends of surplus is provided below.
Annual dividends
End of Q2

Year end

Total

Paid this fiscal year

25 yen30 yen55 yenPaid last fiscal year
(year ended January 2023)

25 yen(Ordinary dividend of 20 yen)(Special dividend of 5 yen)

20 yen45 yen(Ordinary dividend of 40 yen)(Special dividend of 5 yen)

2. Basic Philosophy on Selection of Accounting Standards
The CEC Group will continue to prepare consolidated financial statements in accordance with Japanese GAAP for the time being,in consideration of comparability of consolidated financial statements among different financial periods and entities.
The Group will respond appropriately to application of the International Financial Reporting Standards (IFRS) in consideration ofrelated domestic and international developments.

- 7-

3. Consolidated Financial Statements and Major Notes(1)

Consolidated Balance Sheet(Unit: thousands of yen)Previous Consolidated Fiscal
Year(January 31, 2023)

Current Consolidated Fiscal
Year(January 31, 2024)

Cash and deposits

23,302,042

26,714,532

Notes and accounts receivable - trade, and contract assets

10,103,576

10,343,099

Product

254,597

319,019

Work in progress

504,914531,948

Other accounts receivable

32,35030,346

1,013,313

1,075,983

AssetsCurrent assets

OthersAllowance for doubtful accounts
Total current assets(2,067)(9,394)35,208,727

39,005,535

Non-current assets
Property, plant, and equipment
10,224,665

11,220,735

Accumulated depreciation(6,451,643)(6,658,852)

Buildings and structures, net

3,773,022

4,561,882

2,004,644

2,004,644

Buildings and structures

Land
Others
Accumulated depreciation
Other, net
Total property, plant, and equipment

3,891,832

3,818,483(3,054,165)(2,946,523)

837,667

871,959

6,615,333

7,438,487

Intangible assets
Software213,404

156,897

Software in progress

5,385

43,149Others39,27839,259Total intangible assets

258,067

239,307

Investment securities

1,328,682

1,600,258

Deferred tax assets

799,472

178,076

Net defined benefit asset

830,806

1,566,339

Others1,304,502

1,374,986

Allowance for doubtful accounts(11,909)(11,909)

Total investments and other assets

4,251,553

4,707,750

11,124,954

12,385,544

46,333,682

51,391,080

Investments and other assets

Total non-current assets
Total assets- 8-

(Unit: thousands of yen)Previous Consolidated Fiscal
Year(January 31, 2023)

Current Consolidated Fiscal
Year(January 31, 2024)

Accounts payable - trade

2,251,585

2,211,551

Short-term loans payable

350,000

350,000

Current portion of long-term loans payable

13,60013,800

Income taxes payable

965,599795,357

Allowance for bonuses

585,623

716,224

Provision for loss on orders received

488,092

2,835

1,705

1,900

Others3,654,890

4,914,647

Total current liabilities

8,311,096

9,006,316

Long-term loans payable

13,800–Long-term accounts payable - other

22,12022,120123

53,118Provision for directors’ retirement benefits

19,064

15,050Net defined benefit liability

106,227

111,131

Asset retirement obligations

481,579

1,396,138

Total non-current liabilities

642,914

1,597,558

8,954,010

10,603,874

Capital stock

6,586,000

6,586,000

Capital surplus

6,733,706

6,737,978

Retained earnings

27,105,988

30,135,872

Treasury shares(3,505,438)(3,462,774)

Total shareholder equity

36,920,256

39,997,076

371,132

455,482

Liabilities
Current liabilities

Asset retirement obligations

Non-current liabilities

Deferred tax liabilities

Total liabilities
Net assets
Shareholder equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

7,138

12,611Remeasurements of defined benefit plans

10,713295,633

Total accumulated other comprehensive income

388,983

763,727

70,431

26,40137,379,671

40,787,205

46,333,682

51,391,080

Subscription rights to shares
Total net assets
Total liabilities and net assets

- 9-

(2)

Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Unit: thousands of yen)Previous Consolidated Fiscal
Year(February 1, 2022 January 31, 2023)

Current Consolidated Fiscal
Year(February 1, 2023 January 31, 2024)

Net sales

48,206,206

53,124,026

Cost of sales

36,895,514

39,027,874

Gross profit

11,310,691

14,096,152

Selling, general, and administrative expenses

6,936,467

7,734,324

Operating income

4,374,224

6,361,827

Interest income

1,299

975

Dividends received

24,67524,076

Reversal of allowance for doubtful accounts

2,875

–

Dividends from insurance

12,849

7,953

Miscellaneous income

20,835

21,581

Total non-operating income

62,53454,587

Interest expenses

2,788

2,416

Foreign exchange loss

15,627

3,761

Commission for purchase of treasury shares

3,599

–

Miscellaneous loss

1,328

712

Total non-operating expenses

23,3436,890

4,413,415

6,409,524

Gain on sale of investment securities

2,265,000–

Total extraordinary income

2,265,000

–

2,015

15,957704–

Total extraordinary loss

2,720

15,957

Profit before income taxes

6,675,695

6,393,567

Income taxes - current

1,707,649

1,340,136

Income taxes - deferred(211,365)

511,802

Total income taxes

1,496,284

1,851,938

Net income

5,179,411

4,541,628

Net income attributable to owners of parent

5,179,411

4,541,628

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss
Loss on retirement of non-current assets
Impairment loss

- 10-

(Consolidated Statement of Comprehensive Income)(Unit: thousands of yen)Previous Consolidated Fiscal
Year(February 1, 2022 January 31, 2023)

Current Consolidated Fiscal
Year(February 1, 2023 January 31, 2024)

5,179,411

4,541,628

133,214

84,349Foreign currency translation adjustment

6,614

5,473

Remeasurements of defined benefit plans(190,461)

284,920

Total other comprehensive income(50,632)

374,743

5,128,778

4,916,372

5,128,778

4,916,372

Net income
Other comprehensive income
Valuation difference on available-for-sale securities

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent

- 11-

(3)

Consolidated Statement of Changes in Equity
Previous Consolidated Fiscal Year (February 1, 2022 - January 31, 2023)(Unit: thousands of yen)
Shareholder equity
Capital surplus

Capital stock
Balance at beginning of period

6,586,000

Retained earnings

6,733,706

23,439,194

Cumulative effects ofchanges in accounting
policies
Restated balance

Treasury shares(1,663,539)

44,304
6,586,000

6,733,706

23,483,498

Total shareholder
equity35,095,361
44,304(1,663,539)

35,139,665

Changes in items during theperiodDividends of surplus(1,546,548)(1,546,548)

Net income attributable toowners of parent

5,179,411

5,179,411

Purchase of treasury shares
Disposal of treasury shares(10,373)(1,999,944)(1,999,944)

158,045

147,672

Net changes in items otherthan shareholder equity－

Total changes in items during
periodBalance at end of period––

3,622,489(1,841,899)

1,780,590

6,586,000

6,733,706

27,105,988(3,505,438)

36,920,256

Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements
difference ontranslationof defined benefit
available-for-saleadjustment
plans
securities
Balance at beginning of
period237,918524

201,174

Total
accumulated
othercomprehensive
income439,616

Subscription
rights to shares

Total net assets

201,761

35,736,739

Cumulative effects ofchanges in accounting
policies
Restated balance

44,304
237,918524

201,174

439,616

201,761

35,781,043

Changes in items during theperiodDividends of surplus(1,546,548)

Net income attributable toowners of parent

5,179,411

Purchase of treasury shares(1,999,944)

Disposal of treasury shares

147,672

Net changes in items otherthan shareholder equity

133,2146,614(190,461)(50,632)(131,329)(181,962)

Total changes in items during
period133,2146,614(190,461)(50,632)(131,329)

1,598,628

Balance at end of period

371,132

7,138

10,713388,983

70,43137,379,671- 12-

Current Consolidated Fiscal Year (February 1, 2023 - January 31, 2024)(Unit: thousands of yen)
Shareholder equity
Capital surplus

Capital stock
Balance at beginning of
period6,586,000

Retained earnings

6,733,706

Treasury shares

27,105,988(3,505,438)

Total shareholder
equity36,920,256

Changes in items during theperiodDividends of surplus(1,511,744)(1,511,744)

Net income attributable toowners of parent

4,541,628

4,541,628

Purchase of treasury shares

Disposal of treasury shares

4,271

(3)

(3)

42,66746,939Net changes in items otherthan shareholder equity–

Total changes in items during
periodBalance at end of period

–

4,271

3,029,884

42,664

3,076,820

6,586,000

6,737,97830,135,872(3,462,774)

39,997,076

Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements
difference ontranslationof defined benefit
available-for-saleadjustment
plans
securities
Balance at beginning of
period371,132

7,138

10,713

Total
accumulated
othercomprehensive
income388,983

Subscription
rights to shares

Total net assets

70,43137,379,671

Changes in items during theperiodDividends of surplus(1,511,744)

Net income attributable toowners of parent

4,541,628

Purchase of treasury shares(3)

Disposal of treasury shares

46,939Net changes in items otherthan shareholder equity

84,3495,473

284,920374,743(44,030)

330,712

Total changes in items during
period84,3495,473

284,920374,743(44,030)

3,407,533

Balance at end of period

455,482

12,611

295,633

763,727

26,40140,787,205

- 13-

(4)

Consolidated Statement of Cash Flows(Unit: thousands of yen)Previous Consolidated
Fiscal Year
(February 1, 2022 January 31, 2023)

Current Consolidated Fiscal
Year(February 1, 2023 January 31, 2024)

6,675,695

6,393,567

761,536

672,993704–

Cash flow from operating activities
Profit before income taxes
Depreciation
Impairment loss

61,648

129,970(315,268)(485,257)

Increase (decrease) in provision for directors’ retirement benefits

2,808(4,014)

Increase (decrease) in net defined benefit liability

57,775

4,903

Decrease (increase) in net defined benefit asset

Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on orders received(432,575)(325,249)

Increase (decrease) in allowance for doubtful accounts(6,833)

7,326Interest and dividend income(25,974)(25,052)

Interest expenses

2,788

2,416

Loss on retirement of non-current assets

2,015

15,957

Decrease (increase) in advance payments

14

34(2,265,000)–

Increase (decrease) in contract liabilities

423,398

617,246

Decrease (increase) in notes and accounts receivable - trade(157,907)(238,750)

Decrease (increase) in inventories(17,852)(90,038)

Loss (gain) on sale of investment securities

22,8582,004

Decrease (increase) in other current assets(112,299)(70,204)

Increase (decrease) in notes and accounts payable - trade(287,497)(40,091)

Increase (decrease) in accrued consumption taxes(36,589)

256,119

Increase (decrease) in accounts payable - other

38,423

114,430

Increase (decrease) in accrued expenses(22,940)

72,621

Increase (decrease) in long-term accounts payable - other

Decrease (increase) in other accounts receivable(464,975)–

Increase (decrease) in other current liabilities

83,207

18,669Others226,539

139,393

Subtotal

4,213,700

7,168,997

25,97425,051

Interest and dividend income received(2,788)(2,418)

Income taxes paid

(1,742,106)(1,509,097)

Cash flow from operating activities

2,494,778

5,682,533

Interest expenses paid

- 14-

(Unit: thousands of yen)Previous Consolidated
Fiscal Year
(February 1, 2022 January 31, 2023)

Current Consolidated Fiscal
Year(February 1, 2023 January 31, 2024)(844,800)(430,250)

Payments for asset retirement obligations(7,857)(15,579)

Proceeds from sale of non-current assets–

60

Payments for purchase of investment securities–(150,000)

Cash flow from investing activities
Purchase of non-current assets

2,295,200–

Proceeds from redemption of investment securities

500,000–

Payments for lease and guarantee deposits(40,706)(105,961)

Proceeds from collection of lease and guarantee deposits

24,16910,934

Proceeds from sale of investment securities

OthersCash flow from investing activities

4,561(57,112)1,930,566(747,908)

Cash flow from financing activities(13,600)(13,600)

Purchase of treasury shares(1,999,944)–

Dividend payment amount(1,546,610)(1,512,774)

218

49

(3,559,936)(1,526,325)

5,717

4,190

Net increase (decrease) in cash and cash equivalents

871,126

3,412,490

Cash and cash equivalents at the beginning of period

22,430,915

23,302,042

Cash and cash equivalents at the end of period

23,302,042

26,714,532

Repayment of long-term loans payable

Proceeds from exercise of stock options
Cash flow from financing activities
Effect of exchange rate change on cash and cash equivalents

- 15-

(5)

Notes on The Consolidated Financial Statements(Notes on The Going Concern Assumption)
Not applicable(Changes in Accounting Policies)(Application of accounting standards for calculations of fair value, etc.)
The Company has applied the Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ
Guidance No. 31, June 17, 2021, “Implementation Guidance” hereinafter) since the beginning of the consolidated fiscal year
under review. The Company has elected to apply the new accounting policies prescribed in the Implementation Guidance tofuture accounts in accordance with the transitional treatment set forth in Paragraph 27-2 of the Implementation Guidance. Thischange has had no effect on the consolidated financial statements.
(Segment Information, etc.)[Segment information]
1. Overview of reporting segments
The Group's reporting segments are constituent units of the Group for which separate financial information is available.
They are subject to regular consideration by the board of directors to determine a suitable allocation of management
resources and to assess business performance.
The details of each segment reported are described below.
Segment

Businesses

Digital Industry Business

Provision of ICT products and services to improve business efficiency and quality
and to support production of attractive products, chiefly for customers inmanufacturing industries

Service Integration BusinessSupport for the entire ICT life cycle as needed for corporate and organizational
business reforms and improvements; the comprehensive provision of ICT
products and services including cloud computing and security solutions

2. Methods for calculating net sales, income or loss, assets, liabilities, and other accounts by reporting segment
Account processing for individual reporting segments generally conforms to methods used to prepare the Consolidated
Financial Statements.
Reporting segment profit is based on operating income.
Internal sales and transfers between segments are based on market prices and other considerations.

- 16-

3. Information on net sales, income or loss, assets, liabilities, and other accounts by reporting segment
Previous Consolidated Fiscal Year (February 1, 2022 - January 31, 2023)(Unit: thousands of yen)
Reporting segment
Digital Industry
Business

Service Integration
Business

Total

Amount recognizedon Consolidated
Financial
Statements (Note) 2

Adjustment(Note) 1

Net sales
Sales to externalcustomers

16,834,025

31,372,181

48,206,206–

48,206,206

788

534,422535,211(535,211)

–

Total

16,834,813

31,906,603

48,741,417(535,211)

48,206,206

Segment profit

3,857,574

4,573,823

8,431,397(4,057,173)

4,374,224

Segment assets

4,894,792

11,519,506

16,414,299

29,919,382

46,333,682

11,232366,685

377,917383,618

761,536

53,300330,871384,172

460,628

844,800

Inter-segment sales ortransfers

OthersDepreciation
Increase in the value oftangible and intangible
assets(Notes) 1. Adjustment amounts are shown below:(1) The adjustment of (negative) 4,057,173 thousand yen to segment profit consists mainly of Companywide
expenses not allocated to individual reporting segments. Companywide expenses consist mainly of administrativesection expenses not allocated to individual reporting segments.
(2) The adjustment of 29,919,382 thousand yen to segment assets consists mainly of Companywide assets notallocated to individual reporting segments. Companywide assets consist mainly of administrative-section assets
not allocated to individual reporting segments.
(3) The adjustment of 383,618 thousand yen to depreciation consists mainly of Companywide expenses not allocatedto individual reporting segments. Companywide expenses consist mainly of administrative-section expenses notallocated to individual reporting segments.
(4) The adjustment of 460,628 thousand yen to the increase in tangible and intangible assets consists mainly of
Companywide assets not allocated to individual reporting segments. Companywide assets consist mainly ofadministrative-section assets not allocated to individual reporting segments.
2. Segment profits are adjusted against operating income reported on the Consolidated Statement of Income.
Current Consolidated Fiscal Year (February 1, 2023 - January 31, 2024)(Unit: thousands of yen)
Reporting segment
Digital Industry
Business

Service Integration
Business

Total

Amount recognizedon Consolidated
Financial
Statements (Note) 2

Adjustment(Note) 1

Net sales
Sales to externalcustomers

18,313,525

34,810,501

53,124,026–

53,124,026

342

674,600

674,942(674,942)

–

Total

18,313,867

35,485,102

53,798,969(674,942)

53,124,026

Segment profit

4,100,139

6,606,323

10,706,462(4,344,634)

6,361,827

Segment assets

4,706,312

12,981,753

17,688,066

33,703,013

51,391,080

11,750271,480

283,231389,761

672,993

8,438

216,277

224,715

205,534

430,250

Inter-segment sales ortransfers

OthersDepreciation
Increase in the value oftangible and intangible
assets- 17-

(Notes) 1. Adjustment amounts are shown below:(1) The adjustment of (negative) 4,344,634 thousand yen to segment profit consists mainly of Companywide
expenses not allocated to individual reporting segments. Companywide expenses consist mainly of administrativesection expenses not allocated to individual reporting segments.
(2) The adjustment of 33,703,013 thousand yen to segment assets consists mainly of Companywide assets notallocated to individual reporting segments. Companywide assets consist mainly of administrative-section assets
not allocated to individual reporting segments.
(3) The adjustment of 389,761 thousand yen to depreciation consists mainly of Companywide expenses not allocatedto individual reporting segments. Companywide expenses consist mainly of administrative-section expenses notallocated to individual reporting segments.
(4) The adjustment of 205,534 thousand yen to the increase in tangible and intangible assets consists mainly of
Companywide assets not allocated to individual reporting segments. Companywide assets consist mainly ofadministrative-section assets not allocated to individual reporting segments.
2. Segment profits are adjusted against operating income reported on the Consolidated Statement of Income.

- 18-

(Per-Share Information)
Previous Consolidated Fiscal Year
(February 1, 2022 - January 31, 2023)

Current Consolidated Fiscal Year
(February 1, 2023 - January 31, 2024)

Net assets per share

1,111.48 yen

1,212.54 yen

Net income per share

151.97 yen

135.15 yen

Diluted net income per share

151.45 yen

135.0 yen

(Note) 1. The bases for calculations of net income per share and diluted net income per share are shown below.
Previous Consolidated Fiscal Year
(February 1, 2022 - January 31, 2023)

Current Consolidated Fiscal Year
(February 1, 2023 - January 31, 2024)

5,179,411

4,541,628––

Net income attributable to commonshareholders of the parent (thousands of yen)

5,179,411

4,541,628

Weighted average of the number of commonshares outstanding during the period (shares)

34,080,884

33,604,840

Adjustments to net income attributable toowners of parent (thousands of yen)––

Increase in the number of common shares(shares)

118,50736,310(Subscription rights to shares [shares], included
above)

118,50736,310

Summary of potentially dilutive common shares
not included in computation of diluted net income
per share due to a lack of dilutive effects––

Previous Consolidated Fiscal Year
(January 31, 2023)

Current Consolidated Fiscal Year
(January 31, 2024)

Account
Net income per share
Net income attributable to owners of parent(thousands of yen)Amount not attributable to commonshareholders (thousands of yen)

Diluted net income per share

2. The bases for calculations of net assets per share are shown below.
Account

37,379,671

40,787,205

Deduction from the total net asset value(thousands of yen)

70,431

26,401(Subscription rights to shares [thousands of yen],included in deduction from the total net asset
value)

70,431

26,401(Non-controlling interests [thousands of yen],included in deduction from the total net asset
value)––Net asset value attributable to commonshareholders at end of fiscal year (thousands ofyen)

37,309,239

40,760,804

The number of common shares outstanding at endof fiscal year used to calculate net asset value pershare (shares)

33,567,040

33,616,138

Total net assets (thousands of yen)

(Significant Subsequent Events)
Not applicable.

- 19-

4. Other
Orders received and outstanding balances of orders received
Orders received and the outstanding balance of orders received in the Digital Industry Business exhibited positive trends in the
consolidated fiscal year under review, as this business steadily secured demand from active ICT investment among manufacturing
customers. Orders received and the outstanding balance of orders received in the Service Integration Business also trended
positively due to growth in demand backed by DX promotion and increased orders related to the operation of the ICT
infrastructure, including security solutions.
* The recording period for orders received for certain long-term projects has changed due to the application of the AccountingStandard for Revenue Recognition in the previous year (fiscal year ended January 31, 2023).
Orders received during the consolidated fiscal year under review are broken down below by business segment.

Segment

Orders received(thousands of yen)

YoY change (%)

Balance of orders
received(thousands of yen)

YoY change (%)

Digital Industry Business

18,390,276

107.2%

3,417,463

102.3%

Service Integration Business

34,830,438

98.9%

12,337,208

100.2%

53,220,715

101.6%

15,754,672

100.6%

Total- 20-